The growth of the supply chain software industry

IWarehouse Management Systemt’s not often that a management tool turns into one of the world’s largest commercial sectors, but of the few tools that do, supply chain software is right up there. According to recent research, and an ensuing report from Gartner (one of the planet’s leading information technology research and advisory companies, based in Stamford, Connecticut, USA) the value of the supply chain software industry rose 10.8% last year. It is now worth $9 billion.

In one way it is hardly surprising, and that is on account of the fact that supply chain software is now rated by most companies to be a prime asset in gaining a commercial edge over their competitors. In Gartner’s own words, “Supply chain applications outpaced most other software markets because they remain a key source of competitive advantage in driving business growth objectives”.

Leading supply chain software manufacturers

The 5 biggest players in the supply chain software market are:

  • SAP – $2.56 billion (25.8%)
  • Oracle – $1.45 billion (14.6%)
  • JDA Software – $437.6 million (4.4%)
  • Manhattan Associates – $187.6 million (1.9%)
  • Epicor – $163.5 million (1.6%)
  • Others – $5.12 billion (51.7%)

However, despite the growth of the supply chain software industry, it looks as though there is still plenty of room for further growth.

The Deloitte Third Annual Supply Chain Management Survey

The third annual survey that was recently carried out by Deloitte revealed that supply chain software technology has still got a lot to prove. According to their report, only 38% of businessmen are confident that the supply chains they employ in their organizations have the specialist areas that they need, to give optimal performance.

The survey went on to reveal that only around 43% of businessmen rated their supply chain software to be good enough in terms of thinking strategically and effective problem solving; having said that, about 44% of the 400 respondents who took part in the survey thought that their companies were capable of putting the necessary skills, ability and knowledge into place in the near future. A further 33% stated the fact that they expected their supply chain management teams to improve overall control of the supply chain function, which is likely to involve further investment in supply chain software.

Supply Chain Leaders and Followers

Deloitte’s survey split the survey respondents up into two categories; those who lead, and those who follow. Of the total number of those who took part, only 8% were deemed to be leaders. This 8% was not only those who had the highest turnover in terms of inventory, but were also those who had the highest percentages of on-time deliveries. Not only did this 8% perform better in financial terms, but they also appeared to be more proactive, and more prone to utilize advanced technical solutions, like the latest generation supply chain software.

The report went on to say that a void has opened up between supply chain leaders and followers in terms of how they manipulate analytic and visual data. The tools that the supply chain leaders use take real-time supply chain data from global suppliers, and turn it into contoured supply chain maps. These make it simpler for supply chain managers to be currently aware of what is going on. They help to facilitate more appropriate decision making.

It is posited that supply chain leaders are the ones who are more likely to modify the workings of their supply chain systems. As an example, it was discovered that whereas 60% of leaders were actively considering the in-sourcing of products that were currently being outsourced; only 28% of followers were thinking as radically.

Supply chain leaders drive supply chain software change

The report concluded that supply chain leaders have a greater sense of awareness with regard to the constant movement of economic factors. They also show a greater propensity to change the fabric of the supply chain accordingly.  These are the guys (and gals) who will drive supply chain software change to remodel their supply chains. It’s something that needs to be constantly evaluated so that continuous change can be implemented where necessary.

The impact of new technologies like 3D printing

The survey also took into account the impact that innovative technologies such as 3-D printing are having on supply chains, as they become widely used; moving from prototyping tools into tools supporting full-scale production. With particular regard to 3-D printing, 24% of respondents advised that their companies were using this new technology in one form or another. A further 21% of respondents reported that their companies were likely to take advantage of this new solution sometime soon.

At aircraft manufacturer, Boeing, David Dietrich, an R&D engineer, envisaged how this type of technology could be used to manufacture parts rapidly in more remote locations. This is something that would have a substantial effect on supply chain software evolution.

The continuous evolution of supply chain software design

The development of any innovative technologies that can be used to change supply chain modeling is part of an ongoing technological revolution. It means that supply chain software will be something that must continually evolve. Supply chain leaders will want to incorporate the latest release supply chain software in order to optimize the opportunities that these new innovations can bring about.

In other words, the continued improvement in the size and value of the supply chain software marketplace is set to continue, and indeed increase, in the foreseeable future.


Does your company’s supply chain manager possess supply chain leadership qualities and if so, how does he/she exhibit this?

 

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>